Donald Macaskill, Scottish Care chief executive, told a Holyrood committee the cash was a "conservative" estimate of the extra money required in the next three years, with £330,000 expected to be needed next year.

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There was widespread support for an independent commission on care home fees at the roundtable discussion on care home sustainability held by the Health and Sport Committee, which initially focused on the closure of 12 Bield care homes across Scotland, affecting 167 residents.

Bield Housing and Care chief executive Brian Logan said the announcement was made in October but in some cases residents and families had been given up to nine months advance notice of closures, more than the 90 days contractually required.

He said it had been a "tough" decision and acknowledged it would case anxiety and distress for residents and their families but added it was a last resort for the company.

He said staffing levels were sufficient to deliver services and care was "first class" but the charitable company, set up to help those most in need, did not want to be in a business where it faced moving to filling homes with more lucrative self-funding residents rather than those paid for by the local authority.

Mr Logan told the committee the care home side of the business had been losing money for five years and lost around £375,000 last year, while in total the company had an operating surplus of £1.7 million - which he claimed was an "artificial figure"- and £60 million of reserves, £5 million of which were free cash.

Mr Macaskill said the Bield closures raise profound questions over the "sustainability" of the care home sector in Scotland and warned that significant players in the industry are concerned about their ability to continue.

He said: "Bield is a symptom of disease and that disease is the current underfunding of the social sector in Scotland."

He said: "The bigger picture is how much are we prepared in Scotland to pay for the support and care of some of our most vulnerable citizens?"

Questioned on how much extra money is needed, Mr Macaskill said: "Within the Scottish context I would conservatively estimate in terms of the gaps of social care provision - the whole of social care from children to older people's services - we need a further £1 billion over the next three years."

Michelle Miller, interim chief officer for Edinburgh Health and Social Care Partnership, stressed a new model of care was needed and said if £1 billion was given to "shore up" the old model then more money would constantly be required.